NORSK HYDRO was up NOK9.00 to NOK170.50. Morgan Stanley ups target to NOK200 from NOK176, in a note about the European oil & gas sector, which broker considers attractive/undervalued. says it has questioned its assumptions because of recent volatility, but concludes that nothing has changed, with the outlook robust. Highlights the fact European energy is trading at its lowest P/E relative for 10 years, its lowest absolute P/E for more than 10 years, and its lowest EV/DACF discount to the market for 10 years except for the tech bubble. Rates the company as overweight. Says its top picks in European energy are Vallourec, SBM Offshore, Gazprom, Neste, Mol, Repsol, Statoil, Tullow, Cairn and the company. FRONTLINE was down NOK3.50 to NOK189.50. The company announces first quarter net profit of US$219 million vs consensus of US207 million; first quarter dividend of US$1.50 vs consensus US$2.43. Operating profit comes in at US$275.6 million vs US$236.9 million in fourth quarter. Average daily charter rate for VLCCs was US$73,000, in line with market forecasts, but down from US$77,500 last year. the company booked US$12.1 million in first quarter for gain of sale of assets vs US$29.2 million gain booked in first quarter of 2005. The company says the market is stronger then consensus, but in line with its own expectation. It also says the tight market may make fourth quarter tanker rates very profitable.
Netherlands
MITTAL STEEL was up €0.82 to €25.34. The company says its proposed merger with Arcelor is superior to the Severstal deal (announced this morning) in every way. says Arcelor's shareholders have been denied a premium and a choice in their group's future. This morning Arcelor agreed to merge with Severstal of Russia, forming the no 1 steel company in the world with €46 billion in sales. The transaction values Arcelor at €44 per share excluding €1.85 dividend, vs the company 's €35.62 cash-and-share offer.
TNT was up €0.29 to €28.83. The company wants to focus on more profitable mail and express services. CEO Peter Bakker says the company might use cash to buy back shares, pay a super dividend or invest in other units. Private equity groups KKR and Blackstone have been mentioned as potential acquirers recently.
Spain TELEFONICA was up €0.33 to €12.53. The company says group targets for 2009 include doubling EPS and dividend from €0.91 and €0.50 respectively in 2005. Proposes to pay a dividend of €0.30/share on the 2006 results. The company also announces a limit of €1.5 billion for new acquisition in the period to end 2007. Separately, the company notes debt and financial commitments/OIBDA has reached 2.97x in first quarter06, and aims to bring this down to less than 2.5x in the medium term. Also aims for BBB+/Baa1 as a ratings floor. Additionally, the company says its combined business units will deliver c.€2.5 billion operating cash flow over next 3 years. says the most recent acquisitions (O2, Cesky, Telecom) will deliver €1.3 billion in operating cash flow.
Switzerland
ROCHE was up CHF2.80 to CHF188.60. Genentech (DNA), the company's US unit, has submitted a new application for Avastin as a treatment for breast cancer patients who have not received previous therapy.
Germany
BAYER (BAY) was up €0.63 to €35.65. Bayer has 8.17% acceptance from Schering at the state of play yesterday for its friendly takeover bid at €86 apiece, up from 3.58% a week ago. the company 's offer expires on 31 May.
DEUTSCHE POST was up €0.02 to €21.01. CVC Capital, the British private equity group, is understood to be among investors interested in buying a stake in the company when state-owned bank KfW is allowed to start offloading part of its 41/7% holding, according to FAZ.
Italy
FIAT was up €0.14 to €10.20... Iveco to produce new 4x4 with Santana - the company 's truck division Iveco has reportedly signed a letter of intent with Spain's Santana to jointly develop a new sport utility vehicle, 4x4. Iveco expects to sign the formal agreement by YE, aiming at bringing the vehicle on the market in c.2 years.
France
ARCELOR was down €1.26 to €32.80. Mittal says says its proposed merger with the company is superior to the Severstal deal (announced this morning) in every way. This morning the company agreed to merge with Severstal of Russia, forming the no 1 steel company in the world with €46 billion in sales. The transaction values the company at €44 per share excluding €1.85 dividend, vs the company 's €35.62 cash-and-share offer. In addition, up to €7.6 billion cash will be returned to shareholders. Severstal will pay €1.25 billion in return for a c.32% stake in the enlarged the company ; existing shareholders will retain the remaining 68%.
NATEXIS was up €18.50 to €204.50. CDC agrees to sell its 35% stake in Caisse d'Epargne to the lender itself for €7 billion, allowing the merger of the company 's Natexis investment bank with Caisse d'Epargne's Ixis unit to go ahead. CDC had opposed the deal and said it was not consulted over the transaction. A formal agreement on the creation of Natixis is set to be signed by 1 June, and the deal could be completed by the end of 2006.
UK
HSBC (HBC) was up £0.06 to £9.35. The company says at the end of first quarter, the results of all of customer groups were better than those achieved during the same period last year. Adds that CIBM's results reflect favorable trading conditions in first quarter. says largest businesses in the US, Hong Kong and the UK have all performed well and overall its credit experience remains good.
LADBROKES was up £0.07 to £4.00. The company says in the first four months of 2006 profit increased by 5%, and total gross win rose by 11%. Adds that has had a positive start and is trading in line with expectations.
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